Royce Millar and Adam Carey

Lobbyist, former state government treasurer and current Liberal Party federal president Alan Stockdale played a key role in a multibillion-dollar rail upgrade approved without tender by the Napthine government in March.

The policy, unveiled in February, allows the private sector to submit infrastructure proposals, even if they are not government priorities. The government can accept them without a tender process.

Mr Stockdale's involvement in the Cranbourne-Pakenham project has fuelled concerns about the unsolicited proposals policy, with senior business leader Peter O'Brien warning it could be seen as biased in favour of entrenched and politically connected companies such as MTR, which runs the Melbourne rail network under the name Metro Trains Melbourne.

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Mr O'Brien, a former head of Victorian and Australian chambers of commerce and a 20-year Liberal veteran, said the unsolicited proposals process was potentially open to compromise, ''including through the role of well-connected lobbyists''. ''And the process for the Cranbourne-Pakenham upgrade was a perfect case study for the argument against party officials being lobbyists,'' he said.

Mr O'Brien also heads Airshuttle Commuter Express, a consortium that proposed the introduction of monorail technology in Melbourne - in effect a competitor to Metro (MTM). Treasury has rejected the group's offer to develop a monorail alternative to heavy rail for links to Melbourne Airport, Doncaster and Rowville.

He said that by accepting MTR's unsolicited proposal the government was tying itself to old heavy rail technology and denying Victorians innovative and much cheaper alternatives. He warned that MTR was ''colonising'' Melbourne.

In a statement to Fairfax in January, Mr Stockdale said he had taken steps to ensure there was no conflict of interest between his business activities and his position as Liberal Party president and stressed that he complies with the Victorian government's code of conduct for lobbyists.

Under a Victorian rule requiring current or former political party officials working as in-house executives to register as lobbyists, Mr Stockdale is listed on the Victorian lobbyist register and names MTR subsidiary MTM as one of his clients.

Well-placed transport industry sources have confirmed that when developing the Cranbourne-Pakenham scheme, Mr Stockdale worked closely with MTM on solutions to the complex and expensive problem of removing level crossings.

This included developing a cheaper road-under-rail "lite" grade separation concept, modelled on the members-only rail underpass at Kooyong Tennis Club in Toorak. The "lite" model was pitched to the Napthine government as the best way to remove four level crossings on the Dandenong line but was ultimately scrapped on the advice of VicRoads.

In January, prior to the announcement of the Cranbourne-Pakenham upgrade, Mr Stockdale confirmed to Fairfax Media that he had been present during discussions with the state government on MTM proposals. When asked specifically this month if he had discussed the Cranbourne-Pakenham project with the government, Mr Stockdale referred Fairfax to a statement by MTM.

In that statement, MTM described Mr Stockdale as a ''Metro employee who provides strategic advice to the CEO''.

Nor did the state government respond directly when asked if Mr Stockdale had discussed the Cranbourne-Pakenham upgrade scheme with government.

Martin Barr, a spokesman for Premier Denis Napthine, said the government met with many people. ''Some of these people include former members of Parliament, from both sides of politics.''

Mr Stockdale's dual role as Liberal Party president and lobbyist for companies such as MTM appears at odds with the spirit of Prime Minister Tony Abbott's vow that lobbyists should have ''no role in the running of political parties'', and that ''you can either be a powerbroker or a lobbyist but you can't be both''.

Mr Abbott's office would not respond directly to questions about Mr Stockdale's activities in Victoria. A spokesman stressed that the states had their own rules for lobbyists.

Last month Fairfax revealed detail from leaked cabinet documents that showed the state government had expedited the Cranbourne-Pakenham project to ensure contracts are signed before the November state election.

News of Mr Stockdale's role in the Cranbourne-Pakenham scheme comes as the government assesses the impact of the Cranbourne deal on MTM's eight-year franchise agreement with the state to run Melbourne's rail network.

The agreement expires in 2017 but the 20-year Cranbourne-Pakenham upgrade has entrenched MTR in Melbourne for decades.

Under the upgrade deal, MTR and partners will be paid up to $5.2 billion - about $1 million a day - in state annual service payments (nominal dollars) between 2019 and 2034, in return for works that will boost capacity on the Dandenong corridor by 30 per cent.

Tender documents show the government is paying professional services firm KPMG $110,000 to assess commercial and financial consequences to the state following on from the Cranbourne-Pakenham project.

A government spokesman said the KPMG contract was intended to ensure MTM's ability to run the rail network was not affected by the Cranbourne/Pakenham project. ''The government outright rejects any assertion that the franchise to MTM would be automatically extended beyond 2017 as a result of the unsolicited proposal from MTR,'' the spokesman said.

MTM's profitability has doubled in the four years it has run Melbourne's rail network. Last year it posted a $39.3 million profit.

Melbourne University planning lecturer John Stone, said MTM had put itself in a position of unprecedented power for a private transport operator in Victoria, but there was no assurance the public was benefiting. Metro's first obligation was not to the city's commuters, he said. ''We're having to take their word that this is the best use of a very large amount of public money. Their legal obligation is to their shareholders, not to the travelling public.''